RMD requirements for pension funds
I need to know what the RMD requirements are for the funds in an employer sponsored pension plan upon retirement. I retired on June 30,2014 and chose to take a lump sum distribution option as a direct rollover to my Traditional IRA account. However, there was no RMD dollars withheld from the amount the rollover amount. The RMD dollars were withheld from the direct rollover of the funds from my 401k and 403b. Are the IRS rules for RMD withholding different for a pension fund ? And if so please clarify.
Permalink Submitted by Alan - IRA critic on Tue, 2014-10-14 18:35
If you will have reached 70.5 by the end of 2014, your retirement will make 2014 an RMD distribution year for the pension plan. The plan should NOT have included your 2014 RMD in the direct rollover to the TIRA. The pension rollover should have been handled like the 401k rollover and the rules are no different when the pension lump sum option is chosen. I would call them and ask why the RMD for the pension plan was not withheld. Technically, your pension RMD is considered satisfied even with the rollover, but then rolling it into the TIRA creates and excess TIRA contribution that needs to be corrected. This is easy enough to correct and not costly, but the tax reporting is awkward because you would not report in accord with the 1099R you will receive in January for the pension direct rollover.